No boss should be doing 1600 a hit, it sounds like you've found the persistent bug with crazy boss damage in DKS.
Zagan himself isn't actually hard, it's the Demon Bosses that spawn in from the nests which have the Dragon Blast spell that are the real threat. That's because there's no room to avoid that spell in the small cave and the Dragon has no good healing options.
DTP = Dragon Terror Patrol.
